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Bray, Lincoln, and Mapes arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the
venture. Bray and Lincoln advanced $420 and $630 of their own respective funds to pay for advertising and other expenses. After collecting for all sales and
paying creditors, the partnership has $1,710 in cash,
Use the minus sign to indicate any deficiency for the capital accounts.
a. How much net income was earned from the venture?
660 ✓
b. How should the $1,710 be distributed?
Capital balances and cash distribution s
Capital balances
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Bray
Bray
X
640 V
c. Assume that the partnership has only $900 instead of $1,710. Complete the following table to determine if any of the three partners have a capital
deficiency?
Lincoln
Lincoln
850 ✔
Mapes
220 ✓
Mapes
Total
1,710 V
Total
900 ✓
C